Singapore, 1 November2017… The Monetary Authority of Singapore (MAS) has successfully obtained higher civil penalties against Mr Wang Boon Heng (Wang) and Ms Foo Jee Chin (Foo) for contravening section 201(b) of the Securities and Futures Act (SFA), which prohibits any conduct that operates as a fraud or deception in connection with the subscription, purchase or sale of securities.

2   At the material times, Wang, then an undischarged bankrupt, had conducted share trading for his own benefit, in the name of Foo and another person. Wang did so without the consent or authorisation of the relevant securities trading firms, namely DMG & Partners Pte Ltd (DMG) and UOB Kay Hian Pte Ltd (UOBKH). Foo was aware that trades were being carried out by Wang on her accounts with DMG and UOBKH without the authorisation and/or consent of DMG and UOBKH.

3   On 8 March 2017, MAS had released a statement on the State Courts of Singapore’s ruling (State Courts) that Wang and Foo had contravened section 201(b) of the SFA and had the civil penalty of S$75,000 and S$50,000 imposed on Wang and Foo respectively.

4   MAS felt that the civil penalty quantum awarded by the State Courts did not adequately reflect the severity of the breaches and a higher civil penalty was needed to deter such misconduct. Accordingly, MAS appealed against the State Courts’ civil penalty orders (HC/DCA 6/2017) and, on 31 October 2017, successfully obtained higher civil penalties against Wang and Foo. In this regard, the High Court ordered that the civil penalty against Wang and Foo be raised to S$150,000 and S$75,000 respectively. Wang and Foo were further ordered to pay MAS S$21,000 for the legal costs and disbursements incurred by MAS for the appeal.

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Notes to Editor

(A) The civil penalty regime

(i) A civil penalty action is not a criminal action and does not attract criminal sanctions. The civil penalty regime, designed to complement criminal sanctions and provide a nuanced approach to combat market misconduct, became operational at the beginning of 2004.

(ii) Under section 232(1) of the SFA, whenever it appears that any person has contravened any provision in Part XII of the SFA, MAS may, with the consent of the Public Prosecutor, bring an action in a court against him to seek an order for a civil penalty in respect of that contravention. If the court is satisfied on a balance of probabilities that the person has contravened a provision in this Part which resulted in his gaining a profit or avoiding a loss, the court may make an order against him for the payment of a civil penalty of a sum not exceeding:

(a)  three times the amount of the profit gained or loss avoided by that person, subject to a minimum of either $100,000 (if the person is a corporation) or $50,000 (if the person is not a corporation); or

(b)  (where the contravention has not resulted in the person gaining a profit or avoiding a loss) $2 million, subject to a minimum of $50,000.

(iii)  Notwithstanding the above, MAS may also enter into agreements with any person for that person to pay, with or without admission of liability, a civil penalty for a contravention of any provision of Part XII of the SFA.

(iv) In determining the quantum of civil penalties, the Court takes into consideration all facts and circumstances relating to the contravention and the contravening person.

(v) MAS takes into consideration the degree of seriousness of the misconduct, the extent of impact of the misconduct on the market, the need for effective deterrence and other relevant characteristics of the case when deciding to undertake civil penalty enforcement action.

(B) Section 201(b) of the SFA

Under section 201(b) of the SFA, no person shall, directly or indirectly, in connection with the subscription, purchase or sale of any securities engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person.

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